Contract
Exhibit 10.3
THIS WARRANT AND ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS EXERCISE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) OR WITH ANY STATE SECURITY
COMMISSION, AND MAY NOT BE TRANSFERRED OR DISPOSED OF BY THE HOLDER IN THE ABSENSE OF A
REGISTRATION STATEMENT WHICH IS EFFECTIVE UNDER THE ACT AND APPLICABLE STATE LAWS AND RULES, OR,
UNLESS, IMMEDIATELY PRIOR TO THE TIME SET FOR TRANSFER, SUCH TRANSFER MAY BE EFFECTED WITHOUT
VIOLATION OF THE ACT AND OTHER APPLICABLE STATE LAWS AND RULES.
WARRANT TO PURCHASE COMMON STOCK
OF
THERMA-WAVE, INC.
W-___
|
___, 2005 |
This is to certify that, FOR VALUE RECEIVED, ___or assigns (“Holder”), is
entitled to purchase, subject to the provisions of this Warrant, from Therma-Wave, Inc., a Delaware
corporation (“Company”), ______ (___) fully paid, validly issued and
nonassessable shares of Common Stock of the Company (“Common Stock”) at a price of $1.55 per share
(as adjusted from time to time in accordance with the terms hereof, the “Exercise Price”)
at any time or from time to time during the period from May 22, 2006 through November 22, 2010,
provided, however, if either such day is a day on which banking institutions in the
State of California are authorized by law to close, then on the next succeeding day which shall not
be such a day (the “Exercise Period”) upon 61 days prior written notice or upon a Change of
Control (as defined below) occurring during the Exercise Period. This Warrant is one of a series
of warrants (collectively, the “Warrants”) originally issued in connection with a private
placement of the Company’s common stock pursuant to a Stock Purchase Agreement dated November 18,
2005 (the “Purchase Agreement”).
The number of shares of Common Stock to be received upon the exercise of the Warrants and the
Exercise Price may be adjusted from time to time as hereinafter set forth. The shares of Common
Stock deliverable upon such exercise, and as adjusted from time to time, are hereinafter sometimes
referred to as “Warrant Shares”.
(a) EXERCISE OF WARRANT. This Warrant may be exercised in whole or in part at any time or
from time to time during the Exercise Period by presentation and surrender hereof to the Company at
its principal office, or at the office of its stock transfer agent, if any, with the Purchase Form
annexed hereto duly executed and accompanied by payment of the Exercise Price for the number of
Warrant Shares specified in such form, and the date such items are received by the Company is an
“Exercise Date.” The Holder shall pay the Exercise Price (i) in cash, by certified bank
check payable to the order of the Company or by wire transfer of immediately available funds in
accordance with the Company’s instructions or (ii) if the Current Market Value (as defined below)
exceeds the Exercise Price, by means of a “cashless exercise”, by presenting and surrendering to
the Company this Warrant, in which event the Company shall issue to the Holder the number of
Warrant Shares determined as follows:
| X = Y [(A-B)/A] | ||
`
|
where: | |
| X = the number of Warrant Shares to be issued to the Holder upon such cashless exercise; | ||
| Y = the number of Warrant Shares with respect to which this Warrant is being exercised; | ||
| A = the Current Market Value on the Exercise Date; and | ||
| B = the Exercise Price. |
As soon as practicable after each such exercise of the warrants, and in any event within three (3)
business days thereafter, the Company shall issue and deliver to the Holder a certificate or
certificate for the Warrant Shares issuable upon such exercise, registered in the name of the
Holder or its designee. If this Warrant should be exercised in part only, the Company shall, upon
surrender of this Warrant for cancellation, execute and deliver a new Warrant evidencing the rights
of the Holder thereof to purchase the balance of the Warrant Shares purchasable hereunder. Upon
receipt by the Company of this Warrant at its office, or by the stock transfer agent of the Company
at its office, in proper form for exercise, the Holder shall be deemed to be the holder of record
of the shares of Common Stock issuable upon such exercise, notwithstanding that the stock transfer
books of the Company shall then be closed or that certificates representing such shares of Common
Stock shall not then be physically delivered to the Holder.
(b) RESERVATION OF SHARES. The Company shall at all times reserve, and keep available, solely
for issuance and/or delivery upon exercise of this Warrant such number of shares of its Common
Stock as shall be required for issuance and delivery upon exercise of the Warrants.
(c) PAYMENT OF TAXES AND EXPENSES. The Company and Holder shall each pay one-half of any
recording, filing, stamp or similar tax which may be payable in respect of any transfer involved in
the issuance of, and the preparation and delivery of certificates (if applicable) representing, (i)
any Warrant Shares purchased upon exercise of this Warrant and/or (ii) new or replacement warrants
in the Holder’s name or the name of any transferee of all or any portion of this Warrant.
(d) FRACTIONAL SHARES. No fractional shares or script representing fractional shares shall be
issued upon the exercise of this Warrant. With respect to any fraction of a share called for upon
any exercise hereof, the Company shall pay to the Holder an amount in cash equal to such fraction
multiplied by the “Current Market Value” of a share, determined as follows:
(1) If the Common Stock is listed on a national securities exchange or admitted to
unlisted trading privileges on such exchange or listed for trading on the
Nasdaq National Market, the Current Market Value shall be the last reported sale price
of the Common Stock on such exchange or market on the last business day prior to the date of
exercise of this Warrant or if no such sale is made on such day, the average closing bid and
asked prices for such day on such exchange or market; or
(2) If the Common Stock is not so listed or admitted to unlisted trading privileges,
but is traded on the Nasdaq SmallCap Market, the Current Market Value shall be the closing
price for such day on such market and if the Common Stock is not so traded, the Current
Market Value shall be the mean of the last reported bid and asked prices reported by the
National Quotation Bureau, Inc. on the last business day prior to the date of the exercise
of this Warrant; or
(3) If the Common Stock is not so listed or admitted to unlisted trading privileges and
bid and asked prices are not so reported, the Current Market Value shall be an amount, not
less than book value thereof as at the end of the most recent fiscal year of the Company
ending prior to the date of the exercise of the Warrant, determined in such reasonable
manner as may be prescribed by the Board of Directors of the Company (the “Board”).
(e) RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be entitled to any rights
of a stockholder in the Company, either at law or equity, and the rights of the Holder are limited
to those expressed in the Warrant and are not enforceable against the Company except to the extent
set forth herein.
(f) ADJUSTMENT PROVISIONS. The Exercise Price in effect at any time and the number and kind
of securities purchasable upon the exercise of the Warrants shall be subject to adjustment from
time to time upon the happening of certain events as follows:
(1) In case the Company shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or reclassify
its outstanding shares of Common Stock into a greater number of shares, or (iii) combine or
reclassify its outstanding shares of Common Stock into a smaller number of shares, the
Exercise Price in effect at the time of the record date for such dividend or distribution or
of the effective date of such subdivision, combination or reclassification shall be adjusted
so that it shall equal the price determined by multiplying the Exercise Price by a fraction,
the denominator of which shall be the number of shares of Common Stock outstanding after
giving effect to such action, and the numerator of which shall be the number of shares of
Common Stock outstanding immediately prior to such action. Such adjustment shall be made
successively whenever any event listed above shall occur.
(2) Whenever the Exercise Price payable upon exercise of each Warrant is adjusted
pursuant to Subsection (1) above, the number of Shares purchasable upon exercise of this
Warrant shall simultaneously be adjusted by multiplying the number of Shares initially
issuable upon exercise of this Warrant by the Exercise Price in effect on the date hereof
and dividing the product so obtained by the Exercise Price, as adjusted.
(3) In the event that at any time, as a result of an adjustment made pursuant to
Subsection (1) above, the Holder of this Warrant thereafter shall become entitled to receive
any shares of the Company, other than Common Stock, thereafter the number of such other
shares so receivable upon exercise of this Warrant shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Common Stock contained in Subsections (1) and (2) above.
(4) Irrespective of any adjustments in the Exercise Price or the number or kind of
shares purchasable upon exercise of this Warrant, Warrants theretofore or thereafter issued
may continue to express the same price and number and kind of shares as are stated in the
similar Warrants initially issuable pursuant to this Agreement.
(5) The Exercise Price may be adjusted from time to time in the same manner in which
adjustments are made to the Conversion Price (as defined in the Certificate of Designation)
in accordance with Section 6C of the Certificate of Designation of Rights, Preferences and
Privileges of the Series B Convertible Preferred Stock (the “Certificate of
Designation”); provided, however, that in no event shall the Exercise Price be reduced
below $1.40 (as adjusted for any stock dividends, combinations, reclassifications or
splits).
(6) Upon the occurrence of each adjustment pursuant to this Section (f), the
Company will promptly deliver to the Holder a certificate executed by the Company’s Chief
Financial Officer setting forth, in reasonable detail, the event requiring such adjustment
and the method by which such adjustment was calculated, the adjusted Exercise Price and the
adjusted number or type of Warrant Shares or other securities issuable upon exercise of this
Warrant (as applicable). The Company will retain at its office copies of all such
certificates and cause the same to be available for inspection at said office during normal
business hours by the Holder or any prospective purchaser of the Warrant designated by the
Holder.
(g) RECLASSIFICATION, REORGANIZATION OR MERGER. In case of any reclassification, capital
reorganization or other change of outstanding shares of Common Stock of the Company, or in case of
any consolidation or merger of the Company with or into another corporation (other than a merger
with a subsidiary in which merger the Company is the continuing corporation and which does not
result in any reclassification, capital reorganization or other change of outstanding shares of
Common Stock of the class issuable upon exercise of this Warrant) or in case of any sale, lease or
conveyance to another corporation of the property of the Company as an entirety, the Company shall,
as a condition precedent to such transaction, cause effective provisions to be made so that the
Holder shall have the right thereafter by exercising this Warrant at any time prior to the
expiration of the Warrant, to purchase the kind and amount of shares of stock and other securities
and property receivable upon such reclassification, capital reorganization and other change,
consolidation, merger, sale or conveyance by a holder of the number of shares of Common Stock which
might have been purchased upon exercise of this Warrant immediately prior to such reclassification,
change, consolidation, merger, sale or conveyance. Any such provision shall include provision for
adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Warrant. The foregoing
provisions of this Section (g) shall similarly apply to successive reclassifications, capital
reorganizations and changes of shares of Common Stock and to successive consolidations, mergers,
sales or conveyances. In the event that in connection with any such capital reorganization or
reclassification, consolidation, merger, sale or conveyance, additional shares of Common Stock
shall be issued in exchange, conversion, substitution or payment, in whole or in part, for a
security of the Company other than Common Stock, any such issue shall be treated as an issue of
Common Stock covered by the provisions of Subsection (1) of Section (f) hereof.
(h) REGISTRATION RIGHTS. The holders of the Warrants and the Warrant Shares or their
transferees shall have the registration rights set forth in the Registration Rights Agreement dated
November 22, 2005 between the Company and each of the signatories to the Purchase Agreement.
(i) REDEMPTION. In the event of a Change of Control (as defined below) during the period
between the date of issuance of this Warrant and the expiration of the Exercise Period, prior to
such Change of Control, the Company shall give fifteen (15) days prior written notice of such
Change of Control describing in reasonable detail the material terms and anticipated date of
consummation thereof to the Holder. The Holder may, upon five (5) days prior written notice at any
time thereafter but prior to the Change of Control, at his or her option, require the Company to
repurchase for cash this Warrant, at the election of the Holder (i) for the amount the Holder would
have received in a complete liquidation occurring immediately prior to the Change of Control of the
Company pursuant to the terms of the Company’s Certificate of Incorporation, had this Warrant been
exercised by means of a “cashless exercise” pursuant to Section (a) immediately prior to such
liquidation or (ii) the amount the Holder would have received if the Holder was permitted to
exercise the Warrant by means of a “cashless exercise” pursuant to Section (a) immediately prior to
the Change of Control. If the Change of Control is a transaction in which the Common Stock of the
Company is being sold for stock or securities of another entity, the Holder may elect to receive
such stock or securities in lieu of cash; provided, however, under no circumstances
may such Holder elect to receive voting securities in the Company
Any payment of consideration under this Section (i) shall be contingent upon the actual
closing of the Change of Control transaction.
For purposes of this Section (i) and Section (j), “Change of Control” shall mean any
of the events described below:
(1) The occurrence of any event that would, if known to the Company’s management, be
required to be reported by the Company under Item 5.01(a) of Form 8-K pursuant to the
Securities Exchange Act of 1934 (the “Exchange Act”); or
(2) The acquisition or receipt, in any manner, by any person (as defined for purposes
of the Exchange Act) or any group of persons acting in concert, of direct or indirect
beneficial ownership (as defined for purposes of the Exchange Act) of fifty percent (50%) or
more of the combined voting securities ordinarily having the right to vote for the election
of directors of the Company; provided that the following shall not
constitute a Change of Control: (i) any acquisition directly from the Company; (ii) any
acquisition by the Company or any of its affiliates, or (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company or any of
its affiliates; or
(3) A change in the constituency of the Board with the result that individuals (the
“Incumbent Directors”) who are members of the Board as of the date of this Warrant
cease for any reason to constitute at least a majority of the Board; provided that any
individual who is elected to the Board after the date of this Warrant and whose nomination
for election was unanimously approved by the Incumbent Directors shall be considered an
Incumbent Director beginning on the date of his or her election to the Board; or
(4) Consummation of a merger, consolidation or reorganization involving the Company,
unless such merger, consolidation or reorganization results in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity or parent
thereof) more than fifty percent (50%) of the total voting power represented by the voting
securities of the Company or such surviving entity or parent thereof outstanding immediately
after such merger, consolidation or reorganization; or
(5) A complete liquidation or dissolution of the Company;
(6) A sale, exchange or other disposition or transfer of all or substantially all of
the Company’s business or assets, other than pursuant to a spin-off or comparable
transaction in which the transferee is controlled by the Company or its existing
stockholders immediately prior to such transfer; or
(7) execution of a binding agreement with respect to a transaction that, if completed,
would constitute or result in a Change of Control.
(j) TERMINATION OF WARRANT. In addition to the termination of this Warrant pursuant to the
second paragraph of Section (i) hereof, this Warrant shall expire and shall no longer be
exercisable on 5:00 p.m., California local time, on November 22, 2010; provided,
however, if either such day is a day on which banking institutions in the State of
California are authorized by law to close, then on the next succeeding day which shall not be such
a day.
(k) MODIFICATIONS AND WAIVERS. The provisions of this Warrant may from time to time be
amended, modified or waived, if such amendment, modification or waiver is applicable to all of the
Warrants and is in writing and consented to by the Company and the holders of at least a majority
of the outstanding Warrants and Warrant Shares. Any such amendment, modification or waiver shall be
binding upon the holder of this Warrant (and any assignee thereof) regardless of whether the Holder
consented to such amendment, modification or waiver; provided that nothing shall prevent the
Company and a registered holder from consenting to amendments and modifications to this Warrant
which affect or are applicable to such registered holder only.
(l) ASSIGNMENT. Holder may sell, transfer or assign this Warrant without the prior written
consent of the Company.
(m) GOVERNING LAW. This Warrant shall be governed by and construed under the laws of the
State of Delaware (without giving effect to any conflicts or choice of law provisions thereof that
would cause the application of the domestic substantive laws of any other jurisdiction).
(n) NOTICES. Any and all notices or other communications or deliveries hereunder shall be in
writing and shall be mailed by a nationally recognized courier service or delivered (in person or
by facsimile), against receipt to the party to whom such notice or other communication is to be
given. The address for such notices or communications shall be as set forth in the Purchase
Agreement entered into by the Holder and the Company. Any notice or other communication given by
means permitted by this Section (n) shall be deemed given at the time of receipt thereof.
(o) NO IMPAIRMENT. The Company will not, by amendment of its Certificate of Incorporation or
through any reorganization, transfer of assets, consolidation, merger, dissolution, issuance or
sale of securities, sale or other transfer of any of its assets or properties, or any other
voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all such terms and in
the taking of all such action as may be necessary or appropriate in order to protect the rights of
the Holder hereunder against impairment. Without limiting the generality of the foregoing, the
Company (a) will not increase the par value of any shares of Common Stock receivable upon the
exercise of this Warrant above the amount payable therefor on such exercise, (b) will take all
action that may be necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant, and (c) will
not close its shareholder books or records in any manner which interferes with the timely exercise
of this Warrant.
(p) SEVERABILITY. In case any one or more of the provisions contained in this Warrant shall
be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected or impaired thereby.
The parties shall endeavor in good faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
(q) SECURITIES LAWS. Upon any issuance of Warrant Shares upon exercise of this Warrant, the
Company will be required to comply with the requirements of (1) the Securities Act, (2) the
Exchange Act, as amended, (3) any applicable listing requirements of any national securities
exchange, (4) any state securities regulation or “Blue Sky” laws, and (5) requirements under any
other law or regulation applicable to the issuance or transfer of such shares. If required by the
Company, in connection with each issuance of Warrant Shares upon exercise of this Warrant, the
Holder will give (x) assurances in writing, satisfactory to the Company, that such shares are not
being purchased with a view to the distribution thereof in violation of applicable laws, (y)
sufficient representations, warranties and information, in writing, to enable the Company to rely
on exemptions from the registration or qualification requirements of
applicable laws, if available, with respect to such exercise, and (z) the Holder’s cooperation
to the Company in connection with such compliance.
| THERMA-WAVE, INC. | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
PURCHASE FORM |
||
| Dated |
The undersigned hereby irrevocably elects to exercise the within Warrant to the extent of
purchasing shares of Common Stock and hereby makes payment of $ in payment of
the actual exercise price thereof.
| INSTRUCTIONS FOR REGISTRATION OF STOCK | ||||||||
Name |
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| (Please typewrite or print in block letters) | ||||||||
| Address | ||||||||
| Signature | ||||||||
ASSIGNMENT FORM
FOR VALUE RECEIVED, hereby sells,
assigns and transfers unto
assigns and transfers unto
Name |
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| (Please typewrite or print in block letters) | ||||||
| Address | ||||||
the right to purchase Common Stock represented by this Warrant to the extent of shares as to which
such right is exercisable and does hereby irrevocably constitute and appoint Attorney, to transfer
the same on the books of the Company with full power of substitution in the premises.
Date |
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Signature |
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